Yen strengthens against dollar after G-7 statement

The Japanese yen gained strength against the dollar Tuesday, after the Group of Seven countries said that volatile currency movements could hurt the global economy.

In late Tuesday trading, the U.S. dollar dropped to 93.52 yen, down from 93.70 yen late Monday. The yen had been trading at its lowest level compared to the U.S. dollar since 2010.

In a statement, finance officials from the G-7 countries, which include the U.S. and Japan, insisted they remained committed to exchange rates driven by the market, not government or central bank policies.

Traders took the statement from the G-7 to be singling out Japan's yen, which has slumped since Prime Minister Shinzo Abe took office. Abe has vowed to fight deflation, sluggish or falling prices, that have plagued Japan for years. To trader's ears, that vow implied a weaker yen. When a country's currency weakens, prices for its imports rise and its goods look cheaper to foreign customers.

The euro also gained on the U.S. dollar, edging up to $1.3444 versus $1.3389 late Monday. When the euro strengthens against the dollar, it takes more U.S. money to buy each euro.

The dollar was little changed against the British pound, trading at $1.5652 versus $1.5660 the day before. The dollar weakened slightly against the Swiss franc, slipping to 0.9174 of a franc from 0.9200, late Monday.

The Canadian dollar strengthened slightly against the greenback, trading at CA$1.0029 for every U.S. dollar versus CA$1.0067 on Monday.